EXERCISES/PROBLEMS

On July 1, 20A, Crisuelo Asentista,Jr. and Janna Abano have agreed to form a partnership business engaged in buying
and selling of “tuna” fish within the vicinity of General Santos City. Their contributions among others included the
following:
Asentista Abano
Cash 300,000 400,000
Frozen Tuna 160,000
Delivery Van 950,000
As agreed, Asentista’s “frozen tuna” was revalued at 140,000 while Abano’s mortgage loan balance of 250,000 for her
delivery van was treated as her “personal” obligation from Mitsubishi Gensan Branch
Required:
1. Prepare two simple journal entries to record their respective contributions
2. Prepare a Statement of Financial Position as of the date their partnership was formed.
2-1. Asentisa and Abano
 Requirement I: Cash 300,000
Merchandise Inventory 140,000
ASENTISTA,Capital 440,000

Cash 400,000
Transportation Equipment 950,000
ABANO,Capital 1,350,000

Requirement II:

Current Assets: Partners’ Equity

Cash P 700,000 ASENTISTA,Capital P 440,000
Merchandise 140,000 ABANO,Capital 1,350,000
P 840,000 P 1,790,000

Non-Current Assets:
Transportation Equipment by 950,000 ___________
Total Assets P 1,790,000 P 1,790,000

2-2.
Kent Maula, Reynaldo Montecina and Jeremy Maceda have decided to form a Partnersnip business for the first time. Their respective
contributions consisted of the following:
Maula contributed cash of P150,000 and Furniture and Fixtures worth P100,000 but has a fair market value of P120,000;
Montecina contributed a brand new delivery van which he acquired from Kia Motors at P850,000 and a balance of P100,000 from a
financing company aside from his P50,000 cash contributions;
Maceda's contribution was his expertise in managing the affair of the business and is given a 15% share in profit.
Required:
1. Prepare a compound journal entry to open the partnership book assuming:
a. the P100,000 balance from a financing company is assumed by the partnership.
b. the P100,000 balance from a financing company is not assumed by the partnership.
2. Prepare a Statement of Financial Position right after the formation in requirement 1-a only.

Requirement IA:
Cash P 200,000
 Furniture and Fixtures 120,000
Transportation Equipment 850,000
Accounts Payable P 100,000
Maula,Capital 270,000
Montecina,Capital 800.000
Jeremy Maceda was admitted in the partnership as an industrial partner with a 15% share in
profit.
Requirement IB: Cash P 200,000
Furniture and Fixtures 120,000
Transportation Equipment 850,000
Maula,Capital P 270,000
Montecina,Capital 900.000

Jeremy Maceda was admitted in the partnership as an industrial partner with a 15% share in
profit.

Requirement II:
Asset Current Liabilities
Current Assets Accounts Payable 100,000
Cash 200,000
Non-current Assets Partner’s Equity
Furniture and Fixtures 120,000 Maula,Capital 270,000
Transportation Equipment 850,000 Montecina,Capital 800,000
Maceda,Capital -
Total Partner’s Equity 1,070,000
________ ________
Total Assets 1,170,000 Total Liability & Partner’s Equity 1,170,000

2-3.
Malquisto was already in trading business a year ago. He offered Julius Rocabo to join him in the business
tor the first time. The general ledger balances of Malquisto prior to partnership formation follows:
 Cash 375,000
Accounts Receivable 90,000
Estimated Uncollectibie Accounts (1,000)
Merchandise 420,000
Equipment 250,000
Accumulated Depreciation (50,000)
Accounts Payable (75,000)
Malquisto, Capital ?

Rocabo will oontribute cash equal to one-half of Malquisto's capital balance after the following adjustments are reflected in
the sole proprietors book of Malquisto.

1 Accounts Receivable should have an estimated realizable value of P85,000.

2. Merchandise Inventory should have a net realizable value of P390,000 after considering obsolescence.
3. Equipment should have a carrying value or net book value of P180,000.
4 The omitted accrued utilities of P1,500 should be considered in the adjustment.

Required:

1. Compute the capital balance of Malquisto prior to partnership formation.

2. Adjusting entry necessary to correct the book of Malquisto.
3. Closing entry in the sole proprietorship book of Malquisto.
4. Statement of Financial Position after the formation of partnership.

Requirement I: Debits
Cash P 375,000
Accounts Receivable 90,000
Merchandise 420,000
Equipment 250,000 P 1,135,000

Credits
Estimated Uncollectible Accounts P 1,000
Accumulated Depreciation 50,000
Accounts Payable 75,000 126,000
Account Balance of Malquisto P 1,009,000

Requirement II:

a) Malquisto,Capital 4,000
 Estimated Uncollectible Account 4,000

b) Malquisto,Capital 30,000
Merchandise 30,000

c) Malquisto,Capital 20,000
Accumulated Depreciation 20,000

d) Malquisto,Capital 1,500
Accrued Utilities 1,500

Requirement III:

Estimated Uncollectible Accounts 5,000

 Accumulated Depreciation 70,000
Accounts Payable 75,000
Accrued Utilities Expense 1,500
Malquisto,Capital 953,500
Cash 375,000
Accounts Receivable 90,000
Merchandise 390,000
Equipment 250,000

Requirement IV:
Malquisto and Rocabo
Statement of Financial Position
 As of __________

Assets Liabilities
Current Assets Accounts Payable 75,000
Cash 851,750 Accrued Utilities Expense 1,500 76,500

Accounts Receivable 90,000

Estimated Uncollectible Accounts 5,000 85,000 Partners Equity
Merchandise 390,000 Malquisto,Capital 953,500
Non-current Assets Rocabo,Capital 476,750 1,430,250
Equipment (Net) 180,000
Total Assets 1,506,750 Total Liabilities & Owner’s Equity 1,506,750